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Market Session Recaps

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Asia Session

Tue, Oct 7 2008, 07:55 GMT
by Forex.com Research Desk

FOREX.com

An amazing night as far as moves go, with the surprise 1.0 basis point cut in Australia sparking a windfall of moves across the Asian FX spectrum. With the Royal Bank of Australia widely expected to cut the 7.0% rate by .50 basis points, (some believed a .25 basis point cut was in the works), the 1.0 point cut took the markets by complete surprise, with the RBA citing slowing global growth as the prime factor for the move. Many traders looked past that explanation, and looked to the possibility of a coordinated rate cut, something not seen since the days after the 9/11 terrorist attacks. The 1 point cut was the largest since a 1 point cut in a recession ravaged Australia in 1992. The cut to 6.0% did however bring about a rebound to falling Asian stocks. AUD/USD dropped from near 0.7205 to 0.7022 on the cut, but the Aussie eventually broke through to higher levels, topping out to 0.7315 before settling down near 0.7270 in early London trading.       
      
USD/JPY rebounded from six month lows to grind from 101.23 to 103.25 as traders scampered to buy what they felt were oversold markets. The Bank of Japan left rates unchanged as expected at .50%. EUR/JPY exploded from 136.60 early on to over 140.00, and AUD/JPY moved from 71.90 to over 75.50, leaving behind a five year low of 70.27.      
      
EUR/USD was in a 70 pip range until the RBA announcement, when it popped from 1.3490 to over 1.3610.       
      
The RBA rate decision is significant as it calls out to other central banks to follow the lead and cut rates in an aggressive manner. It would be wise to keep an eye on the possibility of some type of coordinated cut now that the gauntlet has been thrown to the ground.

Upcoming Economic Data Releases (London Session):

• 10/7/2008 7:30 EC  EU Finance Ministers Hold Meeting  7-Oct  
• 10/7/2008 8:30 UK  Industrial Production (MoM)  AUG  -0.40% -0.20%
• 10/7/2008 8:30 UK  Industrial Production (YoY)  AUG  -1.90% -2.00%
• 10/7/2008 8:30 UK  Manufacturing Production (MoM)  AUG  -0.20% -0.20%
• 10/7/2008 8:30 UK  Manufacturing Production (YoY)  AUG  -1.40% -1.60%
• 10/7/2008 10:00 GE  Factory Orders MoM (sa)  AUG  -1.70% 0.50%
• 10/7/2008 10:00 GE  Factory Orders YoY (nsa)  AUG  -0.70% -4.70%
• 10/7/2008 13:30 GE  ECB's Trichet Speaks in Evian, France  7-Oct  
  

Published on  Tue, Oct 7 2008, 07:59 GMT